Social Security makes us party to a Ponzi scheme

From kansascity.com:

Yes, Social Security has a so-called trust fund, said to contain more than $2 trillion. But the treasuries in the “trust fund” are IOUs, and differ from “regular” treasuries in that they are not marketable. In reality, there is no Social Security trust fund.

Also, the “pay as you go” aspect of Social Security will end — in 2017, it is estimated — when payroll taxes are no longer adequate to meet benefit obligations.

At that point, the treasuries in the “trust fund” will be “redeemed” to continue paying benefits at the same pace. And where will the money for those redemptions come? Why, from the general fund of the U.S. Treasury. That means Social Security benefits paid for out of the trust fund are paid for twice, first by payroll taxes and second by other taxes that go into the general fund.

If the federal government wants Social Security to escape the stigma of being a Ponzi, then it must either limit payroll taxes to being no more than benefits, or it must invest the surplus in real income-producing investments, not U.S. treasuries or securities. It should also do away with the accounting fiction known as the “unified budget.”

So, Ponzis and Social Security are operationally identical. The difference between the two is in how their surpluses are used.

In a Ponzi, we’re talking simple grand larceny. But in Social Security, the surplus goes into the U.S. Treasury’s general fund.

But America is entering uncharted waters. The population is aging. The deficit is skyrocketing. We’re at war. And Congress is on a spending spree like no other and wants to “give” health care and Lord knows what else to every last one of us.